11.15.13: Heinz smears Ontario’s tomato capital

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Markets: By the numbers

Friday’s global markets

Japan’s Nikkei
15,165.92 +289.51 +1.95%

China’s Shanghai
2,135.83 +35.32 +1.68%

Hong Kong’s Hang Seng
23,032.15 +383.00 +1.69%

Australia’s S&P/ASX 200
5,401.70 +46.30 +0.86%

If it wasn’t for a simple condiment, the quaint town of Leamington, Ont., situated near the southernmost tip of Canada along the shores of Lake Erie, likely wouldn’t exist, writes the Financial Post‘s Armina Ligaya. After ketchup-maker H.J. Heinz chose the Ontario location as its first site for expansion outside the U.S. for its burgeoning food empire in 1909, the community slowly grew around it. The factory thrived, even inspired a Stompin’ Tom Connors song. Now, the town has grown to nearly 29,000 people, with the Heinz processing plant situated right in centre, with generations of families working at the plant, or the surrounding farms or related industries. But on Thursday, after 104 years of operation, Heinz announced it would be shutting the Leamington plant’s doors, leaving 740 people out of work and dealing a devastating blow to the community. The manufacturing plant, one of three facilities across North America on the chopping block, will be closed down in a staged process over the next six to eight months, Heinz announced on Thursday.

She won’t start her new job for another couple of months, but Janet Yellen already has her work cut out, reports the Financial Post‘s Gordon Isfeld. Winning the support of President Barack Obama, who nominated her, might have been the easiest part. Facing the scrutiny of U.S. lawmakers on Thursday was more like a baptism-under-fire moment. Ms. Yellen’s confirmation as Ben Bernanke’s successor is not in question. She’s one of the most qualified candidates — and the first woman — selected as chairman of the world’s most powerful central bank. But when she does take over at the U.S. Federal Reserve, Ms. Yellen, 67, acknowledges there is still a lot “more work to do.” That will be the hard part. For now, Ms. Yellen, currently the Fed’s vice-chair, told the Senate Banking Committee in Washington to expect more of the same stimulus policies as her predecessor — for at least a while longer. “A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Ms. Yellen said in her testimony before lawmakers on Thursday. “I consider it imperative that we do what we can to promote a very strong recovery,” she said. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”

It’s a favourite talking point for politicians and communications providers but ubiquitous rural access to reliable high-speed Internet remains elusive, reports the Financial Post‘s Christine Dobby. The latest salvo comes from Ottawa, which said Thursday it plans to crack down on companies hoarding access to the resources needed to deploy rural broadband. Industry Minister James Moore said the government will take a use-it-or-lose-it approach to ensure “Canadians living in rural areas benefit from greater access to high-speed Internet services.” “Our government will only renew spectrum licences for those holders that have met all the conditions of licence,” Mr. Moore said in a statement. “Those who have not used the spectrum will lose it.” The announcement read as rather opaque as it related to licences to use two particular types of radio spectrum — the 2300-megahertz MHz and 3500-megahertz bands. Licences in those bands will start to come up for renewal next year and the government said anyone who does not meet deployment requirements would lose their licences.

Sweden’s IKEA Group NV agreed Thursday to buy a 46-megawatt wind farm in southern Alberta from Mainstream Renewable Power Ltd., deepening the furniture maker’s push into renewable energy, writes the Financial Post‘s Jeff Lewis. Mainstream, which has begun construction on the $90-million project, will operate and maintain the wind farm after it’s completed in the second half of next year, the Dublin-based developer said Thursday. IKEA in August agreed to buy a wind farm in Ireland from Mainstream as part of the retailer’s plan to invest US$2.4 billion in wind and solar by 2015. “This wind farm in Alberta, along with existing solar installations at three of our Ontario stores, is a significant step to achieving Ikea’s global ambition to be energy independent by 2020,” Kerri Molinaro, president of IKEA Canada, said in a statement. IKEA’s foray into southern Alberta is the latest example of a large retailer or technology company branching into green energy. Also Thursday, Google Inc. and KKR & Co. said they would acquire six solar farms under development in California by Sharp Corp.’s Recurrent Energy in a deal worth US$400-million.

Walmart Canada is known as the industry giant who forces other retailers to lower their prices simply to keep up, but its latest results suggest stiff industry competition is taking a toll on the mass merchant, reports the Financial Post‘s Hollie Shaw. The unit of the world’s biggest retailer reported a third-quarter decline in customer traffic Wednesday and a drop in same-store sales, an important industry barometer of retail strength. Like grocery rival Loblaw, Walmart is feeling an impact from the pricing war even as it helps to spur it. “Gross profit rate decreased as we continue to invest in price for our customers,” Doug McMillon, head of Walmart International, said during a pre-recorded earnings call from Wal-Mart Stores Inc. on Thursday. Net sales at Walmart Canada were up 3.8% due to expanded square footage, but same-store sales, which strips out any impact from added square footage, fell 1.3%. Customer traffic fell 1.5%. While the Canadian unit does not break out full financial results, a decline in store foot traffic and same-store sales underscores the reality of a marketplace being flooded with a level of retail square footage that outstrips consumer demand.

Pfizer Inc., the world’s biggest drugmaker, will wean its workers off of BlackBerry Ltd.’s phones, citing concerns that the mobile technology company might not be around in the future or may have service interrupted. Pfizer told employees who use BlackBerry devices to instead get an Apple Inc. phone or one run on Google Inc.’s Android operating system. The drugmaker cited Waterloo, Ontario-based BlackBerry’s declining market share and noted that the company attempted to sell itself. “In response to declining sales, the company is in a volatile state,” New York-based Pfizer told employees in a memo obtained by Bloomberg News. “We recommend that BlackBerry clients use their BlackBerry devices and plan to migrate to a new device at normal contract expiration.” Pfizer had 92,000 employees as of its last annual filing, making it the eighth-biggest employer among U.S. and Western European-based health-care companies, according to data compiled by Bloomberg. Contingency plans have been developed in case BlackBerry shuts down or is unable to provide services, Pfizer said in the memo.

JPMorgan Chase & Co., the target of at least eight Justice Department investigations, was mocked and taunted by Twitter users after asking followers to send questions to an executive using the hashtag #AskJPM. The online forum, which the bank canceled late Wednesday, was intended in part to give college students an opportunity to communicate directly with a senior executive, said Brian Marchiony, a spokesman for the New York-based company. “#Badidea! Back to the drawing board,” the bank posted less than six hours after its original post, which drew more than 6,000 responses from users in that span, according to social media tracking service Topsy. The “Snarkpocalypse,” as Twitter user ReformedBroker dubbed it, started after the bank’s official Twitter account posted a call for questions at 1:26 p.m. in New York for investment bank Vice Chairman James Lee, using #AskJPM. JPMorgan’s call for questions provoked jeers from Twitter users, who responded with sarcastic posts about the bank’s mounting legal woes.

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